Steps to Take When Insurance Companies Demand Compensation

Unexpected situations like car accidents can occur at any time. If you find yourself facing a complex legal issue as a result, seeking the assistance of a lawyer may be necessary to navigate the challenges ahead.

This article addresses car accidents and the steps you can take if an insurance company demands compensation. The legal repercussions for at-fault drivers can be severe, and significant financial demands can profoundly impact your life.

When Might an Insurance Company Demand Money Back After a Car Accident?

First, we should make clear when an insurance company might demand you pay them back following a car accident. This often happens if you have brought a personal injury lawsuit against another driver after a car wreck. 

Imagine for a moment that another driver hit your vehicle. You feel certain the other driver caused the wreck. You’re in a no-fault state. That means each driver’s insurance must pay to fix the damage to the insured driver’s vehicle after the crash. 

Your insurance company pays for some of the repairs, but there’s more damage on top of that. If so, you might sue the other driver if they won’t give you the money to make up the difference.   

If this happens, you can go after them in court. You can also hire a lawyer. A car wreck attorney probably knows all about situations like this, and their legal expertise can help you.

If you win your lawsuit, or you get the other driver to offer you a settlement that you accept, you must pay your lawyer out of your winnings or settlement money. Maybe you also get a letter from your insurance company in the mail, though. 

Perhaps they’re demanding some of your winnings or settlement money as well. They want that money to recoup their financial losses when they helped pay the bill after the mechanic fixed your car.

In this situation, you might not know the best path forward. Your lawyer can help you.

Ask Your Lawyer What to Do

First, you should show the lawyer the letter the insurance company sent you. Sometimes, your attorney will determine that the insurance company has no legal standing to demand any money back. 

That does not necessarily mean that an insurance company won’t act unscrupulously. Remember that insurance companies don’t have nonprofit status. They’re for-profit entities. That means the more revenue they keep, or the more money they can claw back after paying out claims, the larger the employee bonuses. 

It might seem like a dishonest way to do business, but sometimes, that’s the reality. If an insurance company senses that they can convince you to give them back some of the money that they paid out to settle your claim, they might do that. 

Fortunately, if you have a competent lawyer who knows all about these cases and this area of the law, they can assist you. If they determine that the insurance company can’t legally get back any money from you, they can contact the company and demand that they cease and desist. 

The lawyer might call, send an email, or get in contact via some other method. However they respond, this sends the message that the insurance company has not intimidated you. You are fighting back, and you’re keeping the money that you won via jury verdict or settlement collection. 

What Happens Next?

Now, the ball has gone back into the insurance company’s court. If they realize they can’t legally get any cash back from you, they will probably back off. If they still think they can hassle you until you relent and give some of that money back, they might press onward and threaten further legal action.

Again, you should follow your attorney’s advice in this scenario. If they say they can handle the situation and represent you in court, if it comes to that, then you should do what they say. 

However, if your lawyer determines that the insurance company has a valid legal claim to some of the money that you either won via a jury’s decision or that you collected from a settlement with the other driver, they might say they can negotiate on your behalf. 

The Negotiation Process

If your lawyer determines that the insurance company has some legal claim to the money you got from the other driver following the accident, they might go through a process where they haggle with the insurance company. Insurance companies want to get as much money from you as they can, but they will also only pursue a claim so far before they feel it’s no longer worth it. 

They may accept a smaller amount than what they originally wanted. Keep in mind that insurance companies have lawyers, too. The larger and more prominent the company, the more attorneys fighting for them they’ll usually have. 

Leave it up to your attorney and the insurance company’s lawyers. They can work out the situation, and usually, your lawyer will negotiate a settlement that won’t hurt you too much financially. You might also state that you’ll give the insurance company no money back whatsoever. If so, then you may face a court date and a legal battle. 

What you should do when an insurance company demands money from you following a car accident varies. These situations often have many moving parts. That’s why having an experienced lawyer who knows their way around this area of the law can make a huge difference. 

If you must give the insurance company back some money, then hopefully, you and your lawyer can reach an agreement with the company so you don’t feel the sting very much. If you must give some money back, you won’t like that too much, but at least you can get past the threatening letters and phone calls and all of the legal posturing. That’s certainly what you want at the end of the day.